Macworld and Boing Boing Gadgets have contacted Apple and confirmed that the chip is said to be meant for use with the 'Made for iPod' program alone and there is no encryption or authentication on the chip.

Apple offers a 'Made for iPod' licensing certification for accessories that work with their iPods. With the introduction of this chip, Apple seems to have extended 'Made for iPod' certification to headphones/remotes that work with the iPod shuffle. Apple offered to sell developers the chip for $1 in a bundle with a $2 microphone, costs which are then multiplied and passed on to consumers. The component costs are now apparently lower. Previously, these accessories were not required to be 'Made for iPod' certified. So while there is no DRM in the chips, themselves, it is unlikely that a 3rd party manufacturer would be carried in an Apple Store unless they are 'Made for iPod'. The implication is that Apple has further extended their control over 3rd party accessories for the iPod.